A Look at JOYY (NasdaqGS:JOYY) Valuation Following Strategic Pivot Toward AI and Global Platforms

JOYY (NasdaqGS:JOYY) recently liquidated its China-based YY Live business. This move marks a strategic shift toward international platforms and highlights the company’s renewed focus on its AI-driven BIGO Ads business.

See our latest analysis for JOYY.

JOYY’s bold restructuring sent a clear message to investors, and the momentum is showing up in the numbers. After a rocky multi-year stretch, the stock has climbed nearly 50% year-to-date and boasts a standout 85% total shareholder return over the past twelve months. The turnaround effort, supported by ongoing buybacks and dividends, has given fresh energy to the share price and hints at renewed market confidence in JOYY’s global pivot.

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But with JOYY’s shares already surging nearly 50% this year and trading close to analyst price targets, investors must ask whether there is still room for upside or if the market is already pricing in its global ambitions.

Most Popular Narrative: 30% Undervalued

At $59.50, JOYY’s share price trades notably below the most popular narrative’s fair value of $59.69. This small gap positions the stock as looking undervalued, according to the narrative’s calculations, and sets the stage for a closer look at the financial engine driving these projections.

The current valuation appears to price in compounding improvements in net margins, as investors expect ongoing advances in AI-driven content recommendation, monetization, and advertising technologies to continually drive higher user engagement, ARPU, and operating efficiency. However, execution and competitive pressures could prevent margin expansion from fully materializing.

Read the complete narrative.

Want to know why analysts think JOYY could break the mold? The core assumptions behind this bold narrative involve a sharp shift in profit margins and a re-rating of the company’s multiple, based on future earnings growth and new monetization streams. Discover which expectations truly move the needle behind this fair value.

Result: Fair Value of $59.69 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are still significant risks. These include intensifying competition in digital entertainment and the potential for overestimated revenue growth in key markets.

Find out about the key risks to this JOYY narrative.

Build Your Own JOYY Narrative

If you’d rather look under the hood for yourself or want to craft your own perspective, building a custom narrative takes just a few minutes, so Do it your way.

A great starting point for your JOYY research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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